Financial Times - February 12, 2008
Huawei rails at security concerns over 3Com deal By Andrew Parker and Paul Taylor in Barcelona The Chinese company participating in the planned buy-out of a US telecoms equipment maker has angrily rounded on US politicians who claim the deal could endanger US national security.
Xu Zhijun, chief marketing officer at Huawei Technologies, told the Financial Times that the concerns expressed by some US lawmakers were "bullshit".
He added there was no need to change the terms of the $2.2bn deal, under which Bain Capital, the US private equity firm, is seeking to buy 83.5 per cent of 3Com, the US network equipment maker, with Huawei taking the remaining 16.5 per cent.
The deal has sparked concerns in the US because 3Com supplies intrusion prevention technology to the US defence department, designed to protect the Pentagon against cyber attack.
The Pentagon believes that hackers in China conducted a massive cyber attack on its systems last year.
Thaddeus McCotter, chairman of the Republican policy committee in the House of Representatives, last month urged US authorities to deny Huawei any part in the 3Com deal, describing the existing buy-out proposal as a "stealth assault on America's national security".
Asked about the concerns that the deal could endanger US national security, Mr Xu said through an interpreter: "That would be bullshit." Pressed to clarify his remarks further, Mr Xu added: "Because we only just take 16.5 per cent."
Mr Xu said Cisco, the leading US network equipment maker, supplied products to Chinese telecoms companies: "Cisco's equipment is everywhere in China." he said. "If the US government is concerned about Huawei, if some of the lawmakers are concerned about Huawei, Cisco is everywhere within China. Who should be more concerned?"
The Committee on Foreign Investment in the United States, a branch of the executive able to block sensitive inward investment, is due to complete its scrutiny of the deal before the end of the month.
Mr Xu stressed Huawei would be a minority shareholder at 3Com, with no final decision-making powers, even if it exercised an option to raise its stake to 21.5 per cent.
He also insisted the Chinese government had no influence over Huawei, adding Beijing was not a shareholder.
He described Huawei as a "private enterprise" that was owned by its 20,000 employees.
The People's Liberation Army is one of Huawei's customers, and Mr Xu confirmed that Ren Zhengfei, Huawei's founder and chief executive, was a former PLA officer.
Mr Xu described the rationale behind Huawei's role in the 3Com deal as a "business investment" from which it hoped to get "investment returns".